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The Journal Editorial Report

News/Business. Paul Gigot discusses news, politics, society and finance. (CC) (Stereo)

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Afghanistan 17, Iraq 7, Bret 3, Steve 3, Taliban 3, Warren Buffett 2, Joe 2, Obama 2, Washington 2, Osama Bin 1, Fannie Mae 1, Joe Rago 1, Cindy Sheehan 1, Milton Friedman 1, Buffett 1, Friedman 1, Jason 1, Prosser Thety 1, Steve Moore 1, Byron 1,
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  FOX News    The Journal Editorial Report    News/Business. Paul Gigot discusses news,  
   politics, society and finance. (CC) (Stereo)  

    August 22, 2009
    11:00 - 11:29pm EDT  

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up next, more bad news for the economy. retail sales sink. troubled mortgages hit a record high. could the wheels be coming off the administration recovery plan. is double talk sinking healthcare reform? we'll take a closer look at obama care's contradictions and the left's meltdown over the public option retreat. as millions of afghans vote despite taliban threat, many americans say the war there is not worth fighting. "the journal editorial report" starts now. welcome to the "journal editorial report." i'm stuart varney.
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first off, could the wheels be coming off the administration economic recovery plan? well with, the bad news keeps coming. retail sales fell unexpectedly, raising fears that the key back-to-school shopping season will hit negative territory for the first time in years. news this week that the number of homeowners delinquent on the mortgages are in foreclosure rose to the highest level in four decades. more than 4% of all borrowers are in foreclosure. about 9% missed at least one payment. triple whammy, if you add to that the continuing problems with unemployment. joining the panel this week, "wall street journal" columnist editor dan henninger, editorial member jason riley and senior economic writer steve moore. steve, we start with you, if i may. the stock market, a traffic rally. we hear that the recession is winding down and may be over. why is the president's recovery plan questioned so harshly? >> well, the one piece of good news, stuart, is the stock market has been on a
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soaring increase over the last three or four or five weeks. i regard the stock market as forward looking indicator. but every time it look like the economy is picking up a little bit of steam, you see the statistics that come out that suggest it's stumbling again. what is making americans most nervous right now is the lousy unemployment numbers. we saw unemployment numbers climb a little bit last week. this suggests we might be in the throng of a jobless recovery where we don't see the unemployment rate fall much. when you have 15 million americans who are unemployed, it's hard for them to pay the rent, pay the mortgage and hard for them to go out and shop. >> i am looking at the credit oblt the president's recovery and i saw the credibility question by warren buffett in the "new york times" where he said look, you can't go on spending, borrowing and printing money like this. i saw it as a warning shot. >> it is a warning shot. we talk about that a lot on
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the program. the threat of inflation. i think buffett also suggested something about the value of the dollar. it's entirely possible they'll try to engage in export-led recovery, which implies cheapening the dollar. cheaper dollar implies feeding inflation in the system. as we said many times on the program, at some point the medical reserve will tighten the liquidity. but they may have to do that in advance of next year's off-year election. that will be politically unpopular. the fed is under tremendous pressure not to tighten next year but it would feed inflation in the system. >> it's not just warren buffett questioning this. "usa today" pull out a poll that said 57% of americans don't think the stimulus package is working. so consumer confidence is down, which is feeding the retail numbers that you mentioned earlier. they look at unemployment as
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steve mentioned, nearly 9.5%. people don't feel confident to gout go out and spend money. hard to see where the economic growth will come from. that is the real problem here with everyone looking for it, the stock market or consumers. typically it's upper income americans who are the job creators, and obama made them enemy number one. going after them. >> it seem like distinct rides of the fence. wall street is rallying. they're looking good. main street suffers from declining consumer spending and lower -- continually higher unemployment. now the housing crisis. tale of two realities, steve? >> look, i think that jason really put his finger on the problem. where is the growth going to come from? the one lesson we learned is you don't create prosser thety and you dorb prosperity and you don't create jobs but
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increasing government spending and i creasing debt. the other portion of the story we haven't mentioned yet is what is going to happen late next year. cap rates will increase on small businesses and investors. the businessmen are reluctant to invest in new enterprises and new equipment and new hires if they think their tax rates are going up. a cock-a-mamie theory you can increase spending and raise taxes later and get growth. >> the housing numbers can get worse before they get better. a lot of people are in homes they can't afford. they're under water. they owe more on the mortgage than the home is worth, which could drive the foreclosure rates down even further. up further. >> we question where is the growth coming from? what about a second stimulus package? >> yeah. i think a second stimulus is probably plan a, b, c for the administration. is it their economic theory that the stimulus creates the multiplier and creates jobs in the economy.
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some within the administration and some outside do want another big stimulus package. politically i don't see it happening. he's asking for the congress to vote for $1.4 trillion healthcare bill. they did a big stimulus package. obviously, the american people are upset about the deficit. so i just don't see that happening. if that doesn't happen i don't see a plan "b" for the administration. as he suggested normally under the circumstances you would go to cutting taxes in a recession. but they need all the tax revenue they can get for the healthcare bill. where does that lead us? >> if i listen to the town hall meeting, anger over healthcare reform, true. but there seems to be anger about the government spending that is just out of control. another stimulus plan would make it worse, wouldn't it? >> there is no question about it. this rage out there that is not just republicans and conservatives but independent
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voters is really a result of the massive debt. look. the voters get the joke. if you have 800 billion of spending it's not free. it has to come from somewhere. that is the fallacy of the stimulus idea. people know that their taxes will have to be raised later to debt is going to have to go up by a massive amount to pay for the spending. >> alan greenspan used to say that the american economy was so deregulated and privatized it's now able to withstand extraordinary blows from from recessions that would have brought it to its knees in the pass. again, his point was it was the private sector that was the strength of the american economy. i just don't see them doing anything to help the private sector. >> when we come back, obama care's contradictions. the president says support for his plan is falling. that because folks aren't listening. but maybe he's in trouble
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>> medicare, it should be a little more competent than maybe the government with a role, a role in the fact that people are treated fairly when it comes to insurance. >> confused about obama care? it could be because the
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president contradicts himself, often times in the same speech. under his reform plan, government bureaucrats won't tell you what tests you can and can't have. but a panel of health experts will. medicare, example of something the government got right, except going broke. the latest administration double talk, well whether the so-called public option is essential to their reform efforts. senior editorial page writer joe rago joins the panel for this segment. all right, joe. i think the this debate is chaotic. what say you? >> that's right. it's not only the contradiction, it's president obama is out there blaming the republican for the current trouble. he doesn't lack republican support. he does. what he lacks is the public support, the democratic support. the administration withdrawal on the public option, which would have been a program like medicare for the plan. liberal democrats, you have
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the conservative democrats running away from the liberals. and chaos is the way to put it. >> haven't even mentioned the republicans yet. dan, what about -- there seems to been attempt to demonize the private insurance companies. we know the healthcare cost, that nancy pelosi tried to call them villains, carpet bomb the american people. boy, something extraordinary happened last week. henry waxman, chairman of the house committee shepherding the bill sent out a letter to chairman of the health insurance companies asking and requesting, quote/unquote, information about compensation levels of all those making over $500,000. they wanted the compensation level, the salary, bonuses, stock options, off jam pus retreats and such. this is wrong sort of intimidation.
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when they did it to the banking industry, the argument is they were taking taxpayer money through tarp and therefore we had an obligation to oversee that the money was well spent. this industry has taken no such money. pistol whiting them to come around and support the bill. >> not just the insurance industry beat up by the administration, but ordinary americans who oppose their the plan. the town hall meetings where conservatives are showing up, voicing thar opposition and labelled as un-american. disruptive. when liberal groups like acorn or moveon.org protest everything that george bush did, it was grassroots democracy. when conservatives do the same thing they are labelled un-american. >> where the republicans in this? the debate is chaotic. within the democratic party. >> it is. republicans run the risk of overplaying their hand here.
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obama did get elected in part on a pledge to reform healthcare. the american people want healthcare reform. maybe not what obama is proposing but they want reform. republicans, have to be seen as negotiating in good faith. >> we talk about the tort reform and state mandate, steve, what do you say? >> i think the american people would like to see obama care under the cash for clunkers program. i think the americans have two big problems with the proposal. number one, the idea you will save money from the healthcare system and create $1 trillion new entitlement is laughable to americans. that is problem number one. problem number two is it turns out about 75 to 80% of americans kind of like the healthcare hay get right now. and all they see is a kind of downside risk to totally restructuring the system, pushing more americans into a government program they don't
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want. >> joe, is there a difference between the public option and the co-op idea? >> some differences i imagine but going in the same direction. if we start co-op in this space it will be another non-profit insurer like blue cross or blue shield. pointless. or it could be government sponsored enterprise like fannie mae and freddie mac where it has a lifeline to taxpayers. gets into all sort of trouble, bailed out and drags out the private sector competition because of government advantages. >> we seem to be coming to a little bit more clear cut debate. between do we get a continuation of private medical care in the united states or do we go the socialized medical system? do we spend $1 trillion or don't we spend $1 trillion?
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it seems to come down a funnel like that. it comes back to arriving like that due to forces in play. the so-called progressives want a public option. the strongest constituencies are the union and the head of the public employee union said two things democrats will be out of office in november if they don't enact the public option. i took it as implication that the unions might pull back some of the support if the democrats don't push it through. next september when they come back they'll be at the same watering hole arguing if there will be a federal insurance program that takes over insurance people have now. >> still ahead, afghan voters defy taliban threats to vote in this week's presidential
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election. a new poll says the american public is raising results to win the war there.
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welcome home, man.
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defying taliban threat aimed at polling stations millions afghans voted thursday as an election seen as a critical benchmark as the nation's progress, as well as the test of the administration new strategy there. president obama this week called the war in afghanistan a war of necessity. one that we have to win. a new "washington post" poll finds majority of americans see the war there is not worth fighting. bret stevens joins our panel.
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bret, a shocking poll. does that put a time limit on president obama freedom of maneuver in afghanistan? >> if he chooses to follow public opinion rather than leave it, it does. americans see a war that's not going well. taliban is insurgent. and election where voters were courageous and intimidated by the taliban. the question is whether this president means it when he speaks about a war of necessity, a war we have to win. on the other hand when obama talks about finishing this war, that suggests that he's looking for some kind of exit strategy. >> he rarely talks about it. >> he understands he spoke of afghanistan as the contrast to war in iraq and america has to win.
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he has the political capital to eare cyst his left flank urging to get out of afghanistan as if 911 never happened. >> should there be a new surge, iraq style in afghanistan? >> the question is surge to achieve what? we have to be realistic about the mission in afghanistan. anyone who has been to afghanistan as i have twice knows it's different country from civilization like iriraq. it's as poor as west africa. you can't talk about rebui rebuilding afghanistan. it's a building operation. i don't think we can terribly optimistic about the prospect for afghanistan becoming a modern democracy in the short run and by that the next couple of decades. what is the mission there? the mission is prevent afghanistan becoming safe haven for terrorists. that can be done without terribly large commitm of u.s. forces. >> you're in a very, very
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long haul. >> small number of forces. long haul but not a lot of troops there. >> i would like to talk about the politics of this. and take issue with one thing that bret said, which is that the president had the political capital to see this through. any president, even as popular as this one, has limited reservoir of capital. this president is drawing down capital on healthcare. the healthcare bill is going to drain his political capital. there are advisors around him that have been telling him you do not want afghanistan to this war on the front pages next november when democrats are running for re-election in the congress. this is a tremendous dilemma and pressure to ratchet down the war in afghanistan. we could pay a price over there if he does that on the ground. but i think he will be asked again and again get us out of there. >> look, the classic problem for democrats is they're
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always perceived as weak on national security. it's important for this president in particular to stand up when it comes to afghanistan. he needs to ask what will hurt more if the american troops are fighting in afghanistan or if he is pulling out of the country and the perception that the country is going where it was when osama bin laden slips in afghanistan and plotted the attack of 9/11. going back to iraq, horrific bombings across the country. does it detract from the president's ability to act forcibly in afghanistan? >> i'm not sure it does. i don't think that the success going forward in afghanistan will be defined by the troops on the ground. in iraq we have withdrawn american troops from the iraqi cities. the iraqis are doing reasonably well. i'm quite optimistic. am i surprised that terrorists are challenging the situation? no, i'm not. do i know who it is?
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they accuse, said it was al-qaeda. it could be iran. there will be continuing challenges to order in iraq. iraq is continually surprised to the up side. >> last word, bret. >> i agree one bombing in baghdad does not make a terrible ending to the war. this president will have to show the same fortitude his much maligned predecessor showed in iraq with the surge. >> will he? >> well, we'll see. >> we shall indeed. thank you. >> we have to take one more break. when we come back, the hit and misse
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all right. time for the hits and misses of the week. bret, what say you? >> what happened to "braveheart?" this is the huge myth of government of scotland for letting free the terrorists who were convicted of murdering 270 people in the
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an ma'am flight 103 that went down over lockerbie scotland 21 years ago. he was sentenced to life in prison when he was set free he wound up spending total of 12 days in jail for every single one of the victims that he killed. a black day for scottlan and victory for terrorists that knows the west don't have the will to punish them. >> what got me is the hero's welcome. >> cindy sheehan, the mom who lost her son in iraq and credit with the bulk to the threat in moral authority of her critique of the war. at least she's a critic of war now that barack obama is in power. last week she told journalists byron york the anti-war left was used by the democratic party. i have like to call it the anti-republican war movement. asked by mr. york if she was still protesting she said she was but the media isn't
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interested anymore. >> what is yours? >> you remember tom delay, the former republican majority leader. he may get a new one after the new gig which is an appearance on the reality tv program "dancing with the stars". this is a hit because it shows there are consequences for bad behavior in washington. this is one of the men most responsible for the g.o.p. overspending and corruption in 2006. instead of becoming a high price lobbyist he's now been reduced to appearing on a challenge show. >> see if he wins. steve? s>> the great towering economist rose friedman, wife of milton friedman died this week. lovely lady and influential economist and coauthor of the book "free to choose." she promoted freedom, free enterprise around the world